Core Insights - Personal finance expert Dave Ramsey emphasizes that debt is the most aggressively marketed product in the United States, surpassing all other products in terms of marketing sophistication and profitability [2][4]. Debt Marketing - Ramsey states that significant resources are allocated to selling debt, making it more profitable than any other product [2]. - He highlights the prevalence of debt marketing, indicating that consumers are heavily targeted to take on debt [2]. Personal Debt Management - A listener named Jessica inquired about including her daughter's $12,000 car loan in her debt repayment strategy, as she has $20,000 in credit card debt [3]. - Ramsey advised Jessica to prioritize paying off her credit card debt before addressing the car loan, which he deemed manageable at the moment [3]. Cosigning Risks - Ramsey warns against cosigning loans, labeling it a "contingent liability" that can lead to financial repercussions for the cosigner [4]. - He shared his personal experience of having to pay off a loan he cosigned, referring to it as paying the "stupid tax" [4]. - Ramsey quoted Proverbs to emphasize the foolishness of cosigning, stating that it reflects a lack of sense [4].

Core Insights - The trend of negative equity in car loans is rising, with 28.1% of trade-ins in Q3 2025 having negative equity, marking a four-year high [1][2] - The average amount owed on underwater car loans has increased to $6,905, up from $4,200 in 2021, with significant portions of trade-in owners owing over $5,000 and $10,000 [2] - The increase in negative equity coincides with a rise in late payments on subprime auto loans, reaching a historic high of 6.5% [3] Trade-In Dynamics - Many motorists are opting to trade in their vehicles despite negative equity, driven by a desire for newer models [4] - The average trade-in vehicle with negative equity is 3.7 years old, indicating a trend of early trade-ins [6] - Rolling negative equity into new loans results in higher average payments, with those trading in underwater loans averaging $907 compared to the industry average of $767 [10] Loan Terms and Interest Rates - The average interest rate for a 60-month new car loan has risen to 7.6%, up from 4.6% four years ago, contributing to the financial strain on borrowers [5] - Longer loan terms are becoming more common, with 22.4% of new vehicle financing being seven-year loans, which can lead to higher overall interest payments [8][9] Consumer Behavior and Recommendations - Consumers often end up purchasing more expensive vehicles than initially planned due to negative equity, creating a cycle of debt [11][14] - Experts suggest strategies for managing underwater loans, including making larger payments, refinancing for better rates, or simply continuing to make payments until equity improves [17][18][20]

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